You got it right - the mother of all indices! US Banking Index. It never happens that world markets will top out without the US Banking index - where all the mess started off back in July 2007.
US Bank Index has underperformed S&P500 for the last few months and it has just started rallying - trying to take out resistance around 51. To me the writing is on the wall - If KBW Bank Index does manage to take out the resistance level then don't look for a top in S&P500 or any other world markets very soon!
The next one is Topix Japanese Banking Index, which is down 90% from its 1992 levels! It recently hit an all time low in November!
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Update on 22nd Dec
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One more picture -- the Japanese Index from 1984-2010
BTW -- As of this morning (22nd Dec) in US markets, US Bank index has made a 6 month high crossing the 51.XX resistance. It looks like it can go up another 7-8% before it meets next resistance at 56-57 range.
Hi Girish,
ReplyDeleteKeep bringing out these unique charts, pal,
it would remain unique and distinct in approach and observation.
Thanks.
Moh,
ReplyDeleteMy pleasure man.
Only this year I have started to focus on world markets. Just trying to gather some facts from blogs and make my own interpretation using charts.
Great, did'nt know about all these indices. By the way, who invests in Japanese markets when they keep going down all the time? :)
ReplyDeleteRM,
ReplyDeleteI have been reading quite a bit abt what happened to Japan in last 20 years. Still I probably understand only 20% what the truth is. but so far the experts seems to suggest that that Japan's history would be repeated in US's future for next 10-15 years
Japanese economy went through a big debt bubble back in 1990s and then the bubble burst taking the index with it down from 38k to 10k now and at the lows it was 7k too a whopping 80% down from its peak 20 years back! (Just updated the post with Japanese stock market chart from 1984-2010)
The reason I mentioned Japanese banking index is that - before making the next big tank, it tends to make a temporary high and then starts crashing.
Thanks Girish for the deep insight!
ReplyDelete